The primary legislation governing the administration and assessment of child support in Australia is the Child Support (Assessment) Act 1989. The Act provides for the primary carer of a child or children to make a claim for child support from the other parent. It can be payable regardless of whether the parents were ever in a relationship
Services Australia is responsible for reviewing applications, assessing the amount of support which should be paid by each parent and the collection and enforcement of child support payments. The assessment of child support is based on a formula which takes into account each parent’s income, the number of children, the age of the children and their living arrangements. There are three different categories of payments.
These are payments of a regular amount on a recurring or cyclical basis.
These are payments for which parties have reached an agreement or the court has made an order (eg payment of school fees or private health insurance). An agreement or order for non-periodic payments must state whether or not those payments will reduce the annual rate of child support payable under the assessment.
A lump-sum payment is a payment made to the other parent as a “credit balance” to be used to meet ongoing liabilities (Section 69A). The court or the agreement must specify the percentage of these liabilities to be met by drawing on the lump sum.
There are also non-agency payments, such as:
- a payment made directly to a payee;
- a payment to a third party in the discharge of a debt owed by the payee, the payer, or both; or
- a non-cash transaction such as a transfer of property or the provision of services.
It is important to note that Services Australia does not have the power to enforce the support payments against third parties.
How can child support be paid?
It can be paid in any of the following ways:
- a private arrangement between the parents;
- a Binding Child Support Agreement; or
- an assessment by the Child Support Agency pursuant to the Act.
What does the agency consider?
The assessment by the agency takes the following factors into account:
- the annual taxable income of both parents;
- the age of each child; and
- the care arrangements for the children.
Generally, if a parent’s share of the combined income is more than their percentage of care of the children then they will pay child support. Alternatively, if the parent’s share of the combined income is less than his/her percentage of care of the children then they will receive child support.
The costs of living expenses of each child are based on research into how much parents usually spend on children in Australia.
What happens after an assessment?
Once you receive an assessment from the agency you can either continue to manage your payments amongst yourselves or have the agency administer the payment.
The agency has the power to enforce a parent’s payment obligations. If the parent who has an obligation to pay child support does not do so, the agency can seek that parent’s employer to deduct the amount payable from his/her income. The agency can also initiate proceedings in the Federal Circuit Court of Australia to enforce the child support obligation.
If you require any legal advice on child support or any other legal matter, contact Armstrong Legal on 1300 038 223 or send us an email.